Dave & Buster’s shares jump as new CEO signals move from defense to offense

Dave & Buster’s Inc. shares jumped almost 7% in Wednesday buying and selling after the corporate introduced that Chief Government Brian Jenkins would retire subsequent week — a transfer that Truist analysts say transitions the corporate into a brand new section of its COVID restoration.

“[W]e view the transition to a brand new CEO as an indication that Dave & Buster’s is shifting its focus from protection (stopping the bleeding from incremental competitors pre-COVID after which survival throughout COVID) to offense (driving visitors by way of innovation in amusements and ‘watch’ belongings),” wrote analysts led by Jake Bartlett.

Whereas Truist says Jenkins was a good selection, having served as chief monetary officer from 2006 by way of Aug. 2018 earlier than changing into CEO, the corporate is searching for one thing completely different now.

Board Chair Kevin Sheehan will function interim CEO.

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“We consider that Dave & Buster’s board and interim CEO, Kevin Sheehan, are searching for a CEO to drive innovation essential to develop visitors, leverage ‘watch belongings’ and higher defend market share as incremental competitors ramps again up,” analysts mentioned.

Truist charges Dave & Buster’s

inventory purchase with with a $56 value goal.

Raymond James notes that Jenkins isn’t leaving after a dispute, however is stepping down after reporting record second-quarter revenue.

“Regardless of the corporate’s sturdy enterprise restoration, Dave & Buster’s shares proceed to commerce at a compelling valuation in our view (2022 EV/EBITDA sub-6x), noting that activist investor Hill Path continues to personal over 9% of the corporate’s shares excellent (as of June 30),” analysts wrote.

Raymond James charges Dave & Buster’s inventory a powerful purchase.

Stifel analysts price Dave & Buster’s inventory a maintain, noting the unpredictability of the continuing pandemic.

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“With elevated uncertainty across the persistence of COVID circumstances post-vaccine and commensurate adjustments in client conduct or working restrictions, we consider the gross sales restoration might not keep its latest tempo,” analysts mentioned.

“We consider the present valuation adequately displays this uncertainty.”

Stifel has a $40 value goal on Dave & Buster’s shares.

Dave & Buster’s inventory has run up 27.9% for the yr to this point whereas the S&P 500 index

has gained 17% for the interval. | Dave & Buster’s shares soar as new CEO alerts transfer from protection to offense


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